Apr 21, 2025 - Business
Trade deals and capital markets deals have become enmeshed
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Illustration: Sarah Grillo/Axios
International trade negotiations often impact deals, but never before have the two seemed so enmeshed.
The big picture: Pending transactions have become high-stakes bargaining chips, in at least three situations.
Situation 1: TikTok
U.S.-China is the world's most significant trade dispute, and keeps escalating.
- TikTok is hardly the centerpiece, but it has outsized political implications for domestic audiences in both countries. Capitulation will be noticed.
- The latest is President Trump saying that he might just delay the divestiture deadline a bit longer until a trade deal can be worked out — even though the two countries haven't begun formal talks. Would that be legal? Nope. But neither were Trump's two prior extensions.
- One wrinkle is that TikTok's continued existence is complicating life for Trump's FTC lawyers, who are trying to argue that Meta operates a social media monopoly.
Situation 2: Shein
European countries are becoming rope in the tug-of-war between the U.S. and China, and Shein could give Beijing a little leverage with London.
- The fast-fashion giant last week received U.K. approval for its IPO, which would be a huge boon for the London Stock Exchange, but hasn't yet gotten sign-off from Beijing.
- Shein also got hammered by the Trump administration's removal of the de minimis exemption for Chinese imports, and has said it will raise prices on U.S. consumers beginning later this week.
Situation 3: U.S. Steel
The U.S. and Japan are engaged in bilateral trade talks, although there are unresolved disagreements.
- Much like the TikTok situation, U.S. Steel's fate should be viewed more through a political prism than an economic one. Its agreement to be acquired by Nippon Steel was a topic of conversation earlier this year between Trump and Japanese Prime Minister Shigeru Ishiba, and came up again on Friday when the president was asked about it by reporters.
- "I have great respect for Nippon," Trump replied. "But we want to have U.S. Steel remain in this country."
- In other words, he still opposes the deal (as he has since it was first announced).
- That comment could give U.S. Steel pretext to sue, if Trump blocks the deal after a revived national security review — arguing, as it did after President Biden's initial block — that the outcome was predetermined, regardless of the CFIUS investigation.
